Making an ethical incentive: money for art, liberty for people

Whilst modern civilisation is familiar with the local, offline marketplace in which people meet face to face, it is not familiar with the global, online marketplace in which people communicate via screen and keyboard – at least not from the perspective of mankind’s long history of commerce.

There remain big problems online, concerning the difficulties people face in terms of establishing each other’s identity/reputation, and how they exchange money (or ephemeral substitute), and how they exchange materials and products between each other. Laws instituting monopolies and otherwise restraining trade are a minor problem in comparison.

Some problems offline, aren’t actually problems online – we just think they are, because we try to replicate online the mechanisms we have become used to using offline.

For example, one doesn’t even need money as such (silver or gold say), because one can make exchanges without it (a loaf of bread for a cauliflower). However, people are still rather familiar with money (or the idea if not the practice). It is because it was once more convenient to make exchanges via an intermediary commodity that we developed facilities for exchanging via that commodity, i.e. silver, silver coins, dollar coins, dollar notes, dollar amounts, and finally, just amounts, e.g. BitCoin. Ultimately, you should realise that you don’t even need the intermediary quantity at all. You simply have a market of things to be exchanged (and some things are silver).

The problems of trading online can all be solved one day, but we can get a long way toward that if we solve one particular problem first.

I think this problem probably gives rise to this idea of a monied like button.

It is the problem of a paucity of mechanisms available for exchanging public works, i.e. products necessarily publicly accessible, such as drinking fountains or literature.

One can make it private, and sell it publicly, or one can sell it privately, and make it public.

In other words, exchange happens when things cross the boundary of a private domain. Money leaves someone’s pocket, or a product leaves someone’s workshop. You cannot sell something you have already given away, nor that which you will not part with. You cannot buy that which you already have, nor that which another will not part with.

In the case of public works, the recipient is effectively the public. Once one has sold a public work to those who bought it, one cannot sell it to anyone else, because everyone else already has it (or has easy access to it).

There are two approaches to the sale of public works. The first is to privatise what should be public in order to sell it back to interested members of the public. The second is to invite interested members of the public to fund the release of a private work to the public.

One can erect iron railings around a park and its fountains and charge admittance. One can invite a nearby community to fund the building of the park via subscription.

One can enact a privilege that abridges the people’s liberty to make copies in order to charge them for copies of a literary work. The author can also invite their readership to fund the writing of a sequel via subscription (or crowdfunding).

The exchange is between those interested in receiving a fountain or sequel, and those interested in supplying it. The product is consequently received by all those who funded it, but importantly, it is not necessarily denied to those who didn’t fund it.

Online, because it is not a place, but a communications medium, there are no effective fences, and no effective reproduction monopolies. So, all we have is the mechanism of subscription. There is no means of enclosure in a communications medium.

One can keep information private, or one can make it public. Of course, some try to do both, by relying upon friction and copyright to charge for copies (music) or access (paywall) even as they deliver their product to the public.

Ultimately, as attempts to enclose ‘virtual space’ or speech fail, and people recognise such attempts are doomed to failure, we revert to natural reliance upon the physical boundary of one’s private domain (office).

So, we have arrived at the private producer, those many interested in receiving their product, and the public as ultimate beneficiary.

There are four obvious ways of looking at this transition of product from private to public and remuneration in exchange:

The producer gives away their products, in hope of receiving donations as a consequence (possibly also commissions).

Those interested in the producer’s products donate in the hope this will reward, support and incentivise production.

The producer completes a product, and advertises/offers it for sale to those who may be interested (possibly subject to private preview).

Those interested in a producer’s product offer to purchase it in exchange for its production and delivery to them (possibly subject to private preview).

In all these cases, the product is considered a public work, and delivery of the product is considered publication.

A gift or donation is unconditional, i.e. is it made without any formal agreement of exchange.

A sale or purchase is conditional, i.e. money is paid on condition work is delivered and/or work is delivered on condition money is paid.

Notwithstanding the potential for altruism, there are tacit exchanges and explicit exchanges, i.e. patronage and subscription.

The facilities for tacit exchange or patronage, that is, donation for publication, are well catered for, and not particularly fraught with difficulty. I am not too concerned with them, e.g. see snowdrift.coop for a project intending to develop a rather sophisticated donation facility.

The 3rd case in which a producer has already completed a product can be considered a special case of the 4th, that has a production delay of zero.

So, we are left with subscribed production. The producer and their subscribers (interested would-be receivers) are interested in exchanging a product for money (whether respective of consequential public benefit or not).

So in this exchange we can easily identify four things, the two parties making the exchange, and the two items each party has to exchange:

Producer – The producer of a public work (an individual or team thereof)

Product – The public work (a complete work, or a part, or an improvement thereof)

Subscribers – Persons interested in the production of the product

Commission – The total amount offered to be paid by the subscribers in exchange

We can also identify other things that may be involved:

Production – the producer’s process of producing a product

Subscription – the subscribers’ process of commissioning a producer/product

Price – the amount the producer would readily accept in exchange

Pledge – the amount offered by a subscriber

Subscription fee – the amount paid by each subscriber (if only one or more amounts are available), which does not exceed the amount pledged.

Public – the ultimate beneficiaries

Auditor – the persons involved in any preview of product or sponsorship on behalf of producer/sponsor.

Having examined the elements of the bargain between producer and subscribers, the next thing is to look to how we facilitate this online.

An online subscription facility must cater for potentially vast set of geographically and politically disparate people, whose only commonality is a shared interest in the producer and/or their products. There is no practical opportunity to facilitate internal debate between them, or haggling on their behalf with the producer.

Each potential subscriber must also be considered to have a minuscule budget in terms of time and money. The subscription decision cost must therefore be negligible, and the expenditure must be disposable (‘fire & forget’ as it were). That is not to say that facilities cannot cater for those with more time and money than most.

We are also not primarily concerned with how to optimise the facility for rapid popular take-up, but how it must operate in the long term, and on a large scale.

Let us imagine a button that a producer can place on their website (effectively and incidentally identifying the producer) that invites the interested members of their audience (would-be subscribers) to pledge $1 in exchange for the production and publication of their next product.

A pledge is just a promise, the expression of an intention to pay money in exchange for something. It doesn’t need any commitment, beyond the initial, one-time registration at the subscription facility’s website. The subscriber’s micro-contract is “I offer $ in exchange for delivery, so if I don’t pay, I don’t receive delivery”. Thus each subscriber can make good their pledges at their convenience (and in accord with their enthusiasm to receive delivery of what they have subscribed to).

Now we can deconstruct monied like. The would-be subscriber is someone who is interested in the producer and their work, therefore they ‘like’ the producer and their work. The would-be subscriber is so interested that they can easily decide to offer a small amount of money in exchange for delivery of more of what they are interested in, more of what they like. Hence, their ‘like’ is a monied one – a ‘monied like’.

It is important to note that the ‘monied’ part is not a donation, nor, more critically, is it the relinquishing of monies. Thus making pledges does not consume the subscriber’s funds. Nor even does delivery. It is receipt that does so, and receipt is in the control of the subscriber. So pledges or ‘likes’ are effectively consequence-free, but they are nevertheless monied.

Conversely, the producer should always be fully informed as to the constituency of their current subscriber base, i.e. in terms of their subscribers’ status.

Fully-funded = have sufficient funds for this subscription at all fee levels (within amount pledged).

It is important to note that a subscriber can have a single dollar funding their account, and appear as a Good, Funded subscriber to a million producers (for dollar subscriptions). That therefore magnifies the power of a subscriber’s funds immensely, whereas donation consumes them and renders them insignificant drops in the ocean.

Recap

The point of 1p2U is to demonstrate The Contingency Market and give an example of a simple facility that enables interested members of an artist’s audience to sponsor the artist’s work, i.e. on the assumption that there’s no market for digital copies given everyone can make their own (and the 18th century privilege of copyright that’s supposed to prevent them is now the brown sludge of an ex-chocolate teapot).

It’s important to note that the key feature in models supported by the Contingency Market is that they are about exchanges, not donations, i.e. commerce rather than charity. All payment for work is based on this contingent exchange: “If you do the work you get paid, if you don’t you don’t”. Moreover, you can only sell your work to those who value it enough to want to pay you to do it.

The exchange of work or goods is what happens in a free market, not manufacturers being able charge someone for the value they extract from a product. If a weaver sees someone other than the purchaser of their basket borrowing it (even to make a copy), they have no right to demand payment from them for the value they infer has been obtained. The vendor may well wish to maximise the value to them of what they accept in exchange for their work, but that’s a marketing problem. It’s the vendor’s task to find the set of customers who value their work the most, to maximise the sale price. Just because they may fail to obtain a theoretical maximum, that’s no reason to be granted a monopoly so similar works can be sold over and over again (given no-one else is at liberty to make copies more cheaply). A state granted monopoly is lucrative, but it’s very expensive to the rest of society. Aside from a monopoly inflated price it has an extreme hidden cost, albeit one shared by all.

Thus 1p2U’s proposition is “If you have umpteen readers willing to sponsor your intellectual work at a penny per article, then 1p2U can facilitate that bargain and exchange”. But, obviously, once the intellectual work is published, and copyable by all at zero cost, then it shouldn’t be, and can’t be, sold again (though some will insist it can be, monopoly or not).

Thus a subscription is a deal based upon a matched pair of offers: the blogger’s offer to publish their blog (the contingency that the feed is published) and a subscriber’s offer to pay a penny (contingent upon the event an item is published after a certain date).

Renewal

However, that’s just the sponsorship for the next article. A subscription is also a continuously renewed sponsorship, and moderating the renewal process is the next significant piece of coding I have to do.

I shall create a new event which is that there is a specific subscriber to the feed:

Subscriber exists/Agent is subscribing

ID:Subscriber=AgentID: Subscriber with this ID is observed to be subscribing

I’ll then create two child events:

Subscription renewal rate

N:Rate=Unknown/0: If renewing, resubscribe to next article

N:Rate>0: If renewing, resubscribe to next article published after ‘Rate’ seconds

Subscription renewal limit

N:Limit=Unknown: Unlimited – renew automatically

N:Limit>0: Do not renew if ‘Limit’ is exceeded by number of articles published since start of last subscription period (last observed to be subscribing)

These two events should give 1p2U subscribers sufficient control, e.g. to start and stop subscribing, to limit their sponsorship to a particular publication rate, and to cap the amount payable. These values can of course be adjusted as often as the subscriber wishes, though it is expected that they will be changed rarely. I will probably set the default Rate at 60 second renewal and Limit at 2,000.

I may also create another event one day to set the subscription payment, e.g.

Subscription payment

C:Payment=Unknown: Offer 1p in exchange for publication of the next article

C:Payment>=0: Offer ‘Payment’ in exchange for publication of the next article

1p2U is a really good idea, and I wish you all the best with your endevours. I would however like you to take in to consideration the “pay per copy problem” which current copyright law also contains. This is that avant guard — the artists that inspire the artists; the experimenters and those that are simply before their time, will continue to not be paid under a pay per subscription system, with only the ones that distill the ideas into more popular digestible forms being the beneficiaries, even if they only manage to make one important, nay, popular work. Further more, this continues, albeit in a much friendlier form, the idea of ownership of information for the consumer, and possibly limits the amount of consumption of culture as people will continue to believe that it is something that you have to, or should, pay for if you want to consume it.

I have been thinking much about this problem, just like yourself, and have come up with a little system that if you wouldn’t mind I could explain to you.

A cultural production society could be created where members pay to receive nothing but a membership card, and pay the appropriate price for their circumstance. However, I imagine special events will be held where only members are invited, discounts on various items will be given to members by businesses that want to encourage arts and journalism. If a creator wants to withdraw the money that has accrued to them then they will also have to become a member. They should however still accrue money in an account even if they are not members.

Many different ways of distribution could be formulated. It is most important for an absolute libertarian approach be established for what type of work is entitled to receive funds, for the risk of censorship is far greater then the risk of rewarding “undesirable” content or even having to decide what is undesirable. I suspect things like smart phones could periodically sample the environment of the user (and deliberately uploaded by that user after he or she has gone through and removed the things he or she doesn’t like or didn’t actually want to consume). Ideally such a system would be run by Google who already have immense amounts of relevant data. Systems could be established to ensure new artists and writers are paid more, and a cap is placed on how much a creator can receive for each item.

My system while feeling somewhat like a charity, rewards creators whose products are consumed. The concrete item of the membership card gives a benefit to consumers. Derivative works would be recognised with all contributors of the work being rewarded. Ownership is not involved — culture stays in society with potential benefit of creators actually encouraging people to create derivatives. The membership cards could be given as gifts. I would also like each member being able to choose how, or at least part of, their contributions are distributed. I’m not sure what is an appropriate price point for membership would be.

I intend on creating a blog soon, I hope to work together with fellow like minded copyright abolitionists.

I don’t see any “pay per copy problem” except that people are indoctrinated by copyright to believe that the author has some right to be paid each time someone copies or performs their work.

People should be paid for their work, not for someone else’s work in copying it, performing it, or selecting it. When a DJ selects a record to play he does some work, which he is paid for, but that work has nothing to do with the work involved in producing the record, or the copy of it. Thus there’s no reason why any of the DJ’s wages should be deducted and diverted to the record label. If the DJ’s audience likes the music they hear there’s nothing stopping them seeking out the musicians to commission them to produce more.

So, it should be clear that if you pay a blogger a penny for each article, who does nothing more than republish other bloggers’ articles, you are paying that penny because you believe the work they do in selecting articles is worth a penny in exchange. So, it’s up to you to decide whose work you want to commission. Do you want to sponsor a writer, a journalist, a reviewer, or a collator? You pay people for the work you want them to do, not for the work others have done (and have been paid by others to do).

The idea of consuming intellectual work is quite unnatural and spawned entirely by copyright. It’s certainly a lucrative illusion to instil in one’s customers, that each time they obtain value from your work they should pay you for it, but this is anathema to the natural laws of free market exchange. Either you rent an object or you purchase it. In both cases you pay the market price roughly equivalent to the expected cumulative value of temporary or permanent possession and use. With respect to intellectual work, unlike fuel or food it cannot be consumed, but if you can fool someone into believing it can be, well, you can fool them into paying for their ‘consumption’. Though such trickery is not ethical.

There have been some ideas suggested where such gullible people can salve their guilt (at having consumed intellectual work without reimbursing the worker), by repaying them after the event.

As for ‘entitlement’, there is no entitlement or right to compensation for doing work. Again, it’s lucrative if you can persuade people of this, but it’s not natural. In a free market, you exchange your services to whoever wants them if you can both agree to an equitable exchange. You don’t chalk the Mona Lisa on a paving slab and then mug passers by for the price you’ve set for your work – whether they like it or not – on the basis of entitlement, however hard you’ve worked. Your art is a promotion of your talents. You invite sponsorship/patronage from anyone who would see you continue, to produce further work.

Others, and perhaps you too, disagree with me on the business of intellectual work being about exchange. Some say that paying artists is all about conscientiously rewarding them for what they’ve done, even that people should be obliged to do so. Or, alternatively, that it's about paying for 'consumption' - notional value received. Here are some links to the reward/recompense oriented:

If the system you have in mind is about rewarding creators whose products are consumed then I suspect you may have more affinity with these three, than with the principle of equitable exchange that I espouse.

Either way, at least we both recognise that copyright has finally come to an end in all but repeal – and presumably agree that it should have been abolished along with slavery. The task that remains is to facilitate commerce in intellectual work without the privilege of a state granted monopoly. To make an ethical incentive: money for art, liberty for people.

I had previously assumed that Contingency Market clients would digest and archive RSS feeds themselves given an underlying assumption that the CM would be RSS agnostic. Thus the CM client (such as 1p2U) would take it upon themselves to register all the appropriate RSS events.

However, being pragmatic about it, the CM is ideally placed to take upon the burden of monitoring RSS feeds itself, leaving clients with only a need to register the feed as an event (an automatically observed one). That way the client can then interrogate the CM for information concerning the history of that feed, e.g. all items published.

I’ve now completed the modifications to the CM.

What I’ve now got to do is remove 1p2U’s rather iffy code that digests the RSS feed and replace it with code that retrieves equivalent information concerning the RSS feed from the CM instead.

Once I’ve done that, there should no longer be gaps in articles, nor cases where subscribers are listed more than once for the same feed.

I’ve been changing the representation of 1p2U subscriptions in terms of Contingency Market events, and still have some way to go. So 1p2U’s detailing of subscribers and articles published is not particularly accurate at the moment (very frustrating).

I’m amused to be hoist by my own petard, as in attempting to hack a direct database change (of URL events to URL_RSS events) I came across a security mechanism I’d long ago introduced to thwart such hacks. Once a contingency has been defined, it’s impossible to change it (because of the use of secure hashes). So, I’m going to have to support both the old contingencies and the new ones until the old ones have been replicated, and can eventually be discarded.

Yup, it takes time, as does other work I have to do in parallel – I had to solve someone’s business critical network failure on Weds & Thursday. I’m banking on 1p2U becoming ever more business critical for us, so I look forward to your work, as you no doubt look forward to mine. :)

I have been intending for the Contingency Market API to operate efficiently remotely as well as locally, hence its current, rather sluggish setup my end to replicate such a use.

However, in wishing to progress a little more quickly with 1p2U, I think I’ll leave the implementation of an object cache for the CM API until a little later (given I doubt there are any API users apart from myself at the mo).

Incidentally, the CM back-end database has been designed from the outset to be bidirectionally replicatable. So that provides an alternative to achieving a similar result via the API keyhole.

As far as my immediate next steps are concerned I’m going to try out an alternative API cache, then ameliorate my deliberate server-side bottleneck, and finally migrate data processing from the page retrieval process to a background one. Page caching is another option, but I’m leaving that until last.

So, 1p2U will not change visually/functionally for a few days, despite a long list of things needing to be done.

The 1p2U project (to let a reader pay a blogger a penny to write another article) has now entered the alpha testing phase, i.e. where although it is incomplete I welcome the more intrepid early adopter to kick its tyres and kindly act as a guinea pig so that more bugs are revealed as it becomes used.

Incidentally, I will now be blogging a little more about 1p2U, so if you’re only interested in my blog articles about ‘Natural IP’ (Intellectual property from a natural rights perspective) then there is now a dedicated Natural IPRSS feed, i.e. http://www.digitalproductions.co.uk/index.php?rss=1&section=Natural-IP. This can be found on the front page of the DP site by some RSS feed readers.

On the ProjectVRMlist I recently suggested a few principles that might make an online revenue mechanism easy:

Publish it – and they will come.

If people think it’s worth paying for, let them pay. If they don’t, improve the product.

Make the decision to pay easy – a token amount – a penny.

Make the intention to pay easy – a click of a button – the actual payment invariably isn’t (save it up for a rainy day).

Payment is voluntary, but not a donation – make the deal clear – value for money.

Your customers are not your enemy, but your ambassadors.

In a response to this, Doc Searls both acknowledged these as describing PayChoice in a nutshell, and suggested the term ‘microaccounting’ might best describe the process of collecting such microtransactions into significantly sized payments.

I think microaccounting is a good term for such a process, but it doesn’t quite pin down the critical aspect.

I have been thinking that this principle of ‘decision/intention to pay’ is actually ‘micropayment’, and the misadventure that people had attempted in the past was better termed ‘microcharging’ (as in “Download/read this for $0.01”).

There are other terms too, i.e. micropledging, micropatronage, microcontracting, etc.

However, as can be observed, the obvious way to reduce the transaction cost of micropayments is to collect them and settle the bill a thousand micropayments later (hence microaccounting). A less obvious, more sophisticated method is demonstrated by PepperCoin (probabalistic distribution of $1 among a thousand payments). As PepperCoin probably discovered, the problem isn’t so much having a mechanism for handling micropayments, but having an application (and especially realising why microcharging can’t apply to published work).

I thus wholeheartedly agree with Clay Shirky on the case against micropayments and even small payments if what is really meant is microcharging or simply charging, but this subtle terminological confusion has discredited what micropayment should have been about, i.e. enabling people who WANT to pay a small amount to do so extremely easily (and that’s ‘pay’ rather than ‘be charged’).

Moreover, and this is what I think people are still missing (cfKachingle), it’s ‘wanting to micropay’ not ‘wanting to be microcharged’ – a dominant, not a submissive act. Moreover, it’s ‘wanting to pay for work to be produced’, not ‘wanting to be microcharged for consuming content already produced’. The latter still reveals contamination by the copyright mentality, that if one benefits from or consumes another’s art one becomes indebted (a disturbingly pervasive mindset that has polluted contemporary culture).

The micropayment must be captured as close as is possible to the decision to pay, because that is precisely the moment at which the payer has sunk the cost of the decision and can absorb the minute friction of executing that decision in the form of a button click. What Shirky explains is that we cannot impose the cost of a decision upon members of an audience (microcharging). However, as I contend, this does not mean that a member of the audience will not wish to make such a decision of their own volition (micropayment).

Even so, we must remain vigilant that we don’t slip back into the misadventure of inviting people to submit themselves to microcharging, e.g. “Give us your credit card and we’ll charge you a penny per page view for consuming our premium content”. That touches on another critical aspect – are you paying for the production of the art, a copy of it, or its use?

Payment: “This is good. I want more. Heck, I’ll pay you to produce more. Where do I click?”

Charging: “I feel indebted to you each time I consume your work. Please keep track of my consumption and bill me later.”

The problem with ‘microaccounting’ is that it applies to both, i.e. the collection of micropayments or microcharges for a later lump payment. It doesn’t shed light on payment vs charge.

Anyway, the term is a minor concern. When audiences become enabled in paying artists, and then do so in large numbers, a term will arise pretty sharpish (I like micropatronage). I certainly can’t see a day when people will say “Please permit these collection societies to withdraw funds from my bank account according to my use of their members’ copyrighted works”. Unfortunately, while people still persist in believing that art is consumed and that consumers must pay for what they consume, there will be a movement that suggests that people should indeed submit themselves to be charged, and failing that, taxed – there can be no volition about it – you consume, you pay.

With the imminent demise of copyright we thus see ourselves at a crossroads: should there be a free market in art (audiences deciding who to patronise and how much), or should art be funded by taxation (appraised and costed centrally)?

Micropatronage works best for me. I think partly because it expresses the relationship well: patronage conjures in the mind historically wealthy donors funding the creation of art. It carries with it no doubt that the person who is paying is doing so not only voluntarily but entirely freely. Also I suspect the payment v charging dichotomy will be hard for people to remember of understand without further explanation.

Naturally, you are free to take any liberties you wish with my published work. However, should I ever be granted the privilege of constraining your liberty then I constrain you thus: the liberties you take may not be withheld from those to whom you give my work (or your combined/derivative work), who you must similarly constrain.